September 2017 Newsletter

2017 Legislation Summary
Michael S. Bender, Esq.
Kaye Bender Rembaum
Recently, Governor Scott signed into Law one Bill which will have a
significant impact on all Community Associations, and another Bill which will
have a significant impact on Condominium Associations only (at this time):
Senate Bill 398 (Chapter 2017-93), pertaining to estoppels that is applicable
to condominium, homeowners’, and cooperative associations and House
Bill 1237 (Chapter 2017-188), applicable to condominium associations only
which provides for numerous new requirements including criminal penalties
and onerous and costly website requirements for those condominiums with
150 or more units and so much more. The information below is not intended
to provide a full explanation, but rather is intended as a summary only.
Senate Bill 398 provides for an overhaul of the estoppel issuance
process. It provides community associations 10 business days to issue an
estoppel or forfeit payment for providing it later. Estoppel fees are strictly
limited to the statutory limits. There is a massive amount of information
that must be contained in the estoppel, far beyond just the amounts due. It
is recommended that Associations work with experienced legal counsel to
create a template for this massive amount of information that will need to be
in the estoppel, which will assist in ensuring that Associations are not unintentionally
waiving their ability to address not only outstanding assessments
or other monetary obligations, but also violations.
House Bill 1237 pertains to condominium associations only, and has
been dubbed the “Condominium Crime Bill”. It was created and passed
in response to allegations of bad acts by a few board members in the
Miami-Dade County area. The Bill includes new criminal penalties for taking
kickbacks, forging voting certificates or ballots, and embezzling association
funds.
A condominium association, its officers, directors, employees, and
agents may not use a debit card issued in the name of the association or
building directly to the association for payment of ANY association expense.
Doing so can be prosecuted as credit card fraud. These new criminal penalties
should not be an impediment to serving on the board absent an individual
with malicious intent.
Board members, managers, and management companies may not purchase
condominium units at a foreclosure sale resulting from the association’s
foreclosure of its lien for unpaid assessments or by taking title by deed in
lieu of foreclosure. In addition to the existing requirement that bids for work
to be performed be part of the association’s official records, bids for materials,
equipment, or services are now required to be part of the association’s
official records.
Effective July 1, 2018, a condominium association with 150 or more
units must have a secure website for which each owner must be provided
a login and password. The website must contain documents including the
rules and regulations, the management agreement, all contracts to which
the association is a party, summaries of all bids for materials equipment and
services, the annual budget, the proposed annual budget, financial reports,
proof of board of member certification, and notice of any unit owner meeting
and the agenda no later than 14 days prior to the meeting and such notice
must be posted in plain view on the front page of the website or a separate
sub page of the website labeled notices which is conspicuously visible and
linked from the front page. The association must also post on its website any
document to be considered and voted on by the owners during the meeting or any
document listed on the agenda at least seven days prior to the meeting at
which the documents or information within the document will be considered.
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Also, notices of board meetings, agendas, and any other document required
for the board meeting must be posted no later than the date of the regular
meeting notice requirements, meaning either 48 hours for 14 days depending on
the requirements of the meeting notice. Associations now have an affirmative duty
to ensure that no protected information or information restricted from being
accessible to unit owners is included in the documents that are required
to be posted on the website, and if so, then the association has the duty to
ensure such information is fully redacted.
Condominium associations that operate fewer than 50 units can no longer
opt out of preparing a report of cash receipts and expenditures simply
because they have 50 or fewer units. Rather, they will be minimally required
to comply with the financial reporting requirements based upon the total
revenues of the association.
Notably, a board member may not serve for more than four consecutive
two-year terms unless approved by an affirmative vote of two-thirds of the
total voting interests of the association, unless there are not enough eligible
candidates to fill the vacancies. While not addressed in the legislation, it is
oddly apparent that any directors serving only one year terms can serve an
unlimited number of such terms. Additionally, the recall provisions have been
completely revised which is already causing confusion.
Condominium associations cannot employ or contract with any service
provider that is owned or operated by a board member or with any person
who has a financial relationship with a board member or officer or a relative
within the third degree of consanguinity by blood or marriage of a board
member or officer.
Directors and officers of a condominium board and the relatives of such
directors and officers must disclose to the board any activity that may be
reasonably construed to be a conflict of interest and there are a host of occurrences
which gave rise to the need to make such a disclosures that are
set out in the legislation.
Provisions are made for lawyers who are board certified in the area
of community association law to be contracted by the Division of Florida
Condominiums, Timeshares, and Mobile Homes (the ‘Division”) to be arbitrators.
This certification was recently approved by the Florida Supreme Court, and
the process to become a board certified community association lawyer will
begin this summer.
A revision was made to the ability to suspend the voting rights of an
owner now requiring that the monetary obligation to the Association be
GREATER than $1,000 for more than 90 days before such rights can be
suspended by the Board, and the suspension cannot take effect for at least
30 days from the noticing of the suspension.
Finally, condominium associations must provide an annual report to the
Division containing the names of all of the financial institutions with which
the association maintains its financial accounts.
Additionally, SB 1520 (Chapter 2017-122) making some modifications
to the terminations of Condominiums and HB 6027 (Chapter 2017-161) addressing
some financial reporting requirements (including that Condominiums,
Co-ops and HO associations that operate fewer than 50 units/parcels can
no longer opt out of preparing a report of cash receipts and expenditures
simply because they have 50 or fewer units the removal of the restriction
on condominiums that an association may not waive the financial reporting
requirements for more than 3 consecutive years), also were signed by the
Governor. All Bills discussed herein have an effective date of July 1, 2017.